Law Office of Brent Gaines v. Healthport Technologies LLC

LAW OFFICE OF BRENT GAINES, individually and on behalf of all others similarly situated, Plaintiff,v.HEALTHPORT TECHNOLOGIES, LLC. Defendant.

MEMORANDUM AND ORDER

STACI
M. YANDLE, UNITED STATES DISTRICT JUDGE.

This
matter is before the Court on Defendant Healthport
Technologies, LLC's (“Healthport”) motion to
dismiss Plaintiff's Complaint pursuant to Federal Rules
of Civil Procedure 12(b)(1) and 12(b)(6) (Doc. 8). Healthport
argues that Plaintiff lacks standing, that its settlement
offer renders Plaintiff's claims moot, and that because
the conduct complained of is not unlawful, it cannot support
a claim under the statutes asserted by Plaintiff. Plaintiff
opposes the motion (Doc. 16). For the following reasons, the
motion is GRANTED.

Background

Defendant
Healthport manages medical record requests for healthcare
providers. It is an LLC with its principal place of business
of Georgia and its sole member is a Delaware corporation.
Plaintiff is a law firm that represents clients seeking
Social Security benefits. It is located in Belleville,
Illinois.

The
nature of Plaintiff's work requires that it obtain its
clients' medical records. Occasionally, a client
believes, but is not certain, that he/she was treated by a
particular provider. In the interest of due diligence,
Plaintiff sends medical records requests to these facilities
in order to determine whether they treated the client.
Plaintiff sent such requests to two of Healthport's
clients, one in Illinois and one in Missouri. In both
instances, Healthport informed Plaintiff that it had found no
record of treatment and presented a bill for what it called a
“Basic Fee.” (1-1 at 5-6).

Plaintiff
filed a four Count class action lawsuit in the Circuit Court
of St. Clair County, Illinois, alleging that Healthport's
Basic Fees violated Illinois and Missouri's medical
records release statutes and consumer protection statutes in
those states and Georgia. The putative class is comprised of
Missouri and Illinois attorneys and law firms who were
charged Healthport's Basic Fee when no records were
provided. Healthport removed the case to this Court under 28
U.S.C. § 1332(d).

Discussion

F.R.C.P.
12(b)(1) - Subject Matter Jurisdiction

After
Plaintiff filed its Complaint in this matter, Healthport made
an offer to settle Plaintiff's claims. Plaintiff did not
accept the offer (Doc. 8 at 4-5). Healthport now argues that
subject matter jurisdiction is lacking because the settlement
offer mooted Plaintiff's case in regards to any
previously assessed charges and because Plaintiff lacks
standing to seek injunctive relief or to recover money
damages (Doc. 8). “When evaluating a facial challenge
to subject matter jurisdiction under Rule 12(b)(1), a court
should use Twombly-Iqbal's
‘plausibility' requirement, which is the same
standard used to evaluate facial challenges to claims under
Rule 12(b)(6).” Id. at 174.

The
Seventh Circuit has explained the requirements for Article
III standing as follows:

To establish Article III standing, ‘a plaintiff must
show (1) it has suffered an ‘injury in fact' that
is (a) concrete and particularized and (b) actual or
imminent, not conjectural or hypothetical; (2) the injury is
fairly traceable to the challenged action of the defendant;
and (3) it is likely, as opposed to merely speculative, that
the injury will be redressed by a favorable decision.
Silha v. ACT, Inc., 807 F.3d 169, 173 (7th Cir.
2015).

Here,
Plaintiff claims that it has been charged an illegal fee and
that it is entitled to monetary damages and injunctive relief
to ensure that the problem does not continue.

Standing
to seek injunctive relief requires only “a reasonable
probability of imminent, tangible harm.” Taylor v.
Stewart, 479 Fed.Appx. 10, 13 (7th Cir. 2012) (internal
citations and quotations omitted); accord Slapper v.
Amnesty Int'l, USA, 133 S.Ct. 1138, 1160-1161 (2013)
(collecting cases with varying articulations of standard,
including “reasonable probability”). On the one
hand, Healthport argues there is an insufficient likelihood
of a subsequent, similar injury. At the same time however, it
complains of Plaintiff frequently engaging in a practice not
uncommon within the plaintiff bar, has offered a settlement
and release that applies only to previous, but not
prospective charges, and admits no wrongdoing. Under these
facts, coupled with Plaintiff's allegations, it is
plausible, if not likely that this situation will present
itself again. Therefore, Plaintiff has standing to seek
injunctive relief.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regarding
money damages, the fact that Plaintiff has not paid the
disputed fees does not foreclose a finding that it has
suffered an injury that may justify the award of money
damages. While Healthport might well be correct that none of
the statutes under which Plaintiff makes its claims allow for
damages, that is not a challenge to subject-matter
jurisdiction, but rather the basis for a Rule 12(b)(6)
dismissal.[1] Under Rule 12(b)(1), the question is
whether an allegedly invalid, uncollected debt can serve as
the basis for standing to sue for damages. Several courts
have answered this question in the affirmative. See,
e.g., Huyer v. Wells Fargo & Co., 295 F.R.D. 332,
341 (S.D. Iowa 2013) (&ldquo;Being subject to an invalid debt
satisfies Article III standing requirements.&rdquo;)
(quoting Aho v. AmeriCredit Fin. Servs., Inc., 277
...

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